Types of Tax Relief

These are effectively depreciation for tax purposes. They allow tax payers to set off the cost of qualifying assets against their business projects to reduce the tax payable.

Available in many forms, Capital Allowances are available to UK tax payers. The main forms are listed below – click on the link for more details.

• Plant & Machinery Allowances
• Plant & Machinery – the most common form of capital tax relief
• Integral features – a new relief from April 2008 at a 8% rate
• Enhanced Capital Allowances – relief for investment in energy efficient assets
• Long Life Assets – for assets with a useful economic life of 25 years or more
• Short Life Assets – for assets disposed of within 8 years
• Research & Development Allowances
• Relief for investment into qualifying research and development technologies
• Industrial Building Allowances
• For expenditure incurred on an “industrial” building, structure or hotel. This relief has however now been phased out
• Business Premises Renovation Allowances
• To encourage the regeneration of commercial property in deprived areas
• Annual Investment Allowance
• A valuable incentive to encourage capital investment

This is a “green” environmental tax relief aimed at encouraging investment in brown-field or derelict sites which contain contaminants or obstructions. It has been available for some years, but remains an under-used tool for developing brown-field land.

A long-standing instrument, this provides relief for capitalised expenditure incurred on repairs to assets or the maintenance of assets.